Know Where your Money is Going and Why

Does your spending aid or hinder your life goals?

• Take a couple of weeks to a month and record, why, where and when you spend your money.
  
  
• Know how much you spend and why you spend.
  
• Do you impulse buy to reward yourself or make yourself feel better?
  
  
• What can you do without - or with less?
  
  
• Are you addicted to ATM withdrawals?
  
  
• Is your budget realistic or is it padded? – Be honest!
  
  
• Can you spend less or earn more?
  
  
• Be sure you understand the consequences of both.
  
  
• Create a system that allows you to keep tabs on everything you spend (don’t forget ATM withdrawals).
  
  
• Be sure to balance your checkbook at least every month and use a cash flow analysis to complement your budget.
  

What are you worth?

• Know what you are worth. Whether on the brink of bankruptcy or comfortably wealthy, a net worth statement is a valuable planning tool.
  
  
• Calculating your net worth will assist you in measuring your progress toward your goals. You have to know where you are before you can figure out how to get where you want to go.
  
  
• Determine your net worth on a regular basis, at least annually.
  
  
• Make January 2nd, Annual Update Your Net Worth Day.
  
  

Pay your taxes, but only what you owe.

• Take advantage of tax breaks. Find out if you and/or your family qualify for any of the federal tax breaks such as the Hope or Lifetime Learning tax credit.
  
  
• In addition, find out if you are eligible to deduct your student loan interest payments on your tax return.
  
  
• When dealing with tax matters it is strongly recommended to consult with a qualified tax professional.
  

Saving and money savvy!

• Make saving money and becoming money-savvy a priority. Saving money and gaining money savvy is both attitude and acquired skill.
  
  
• Understand that as a student, money not borrowed is like creating your own scholarship because it does not have to be repaid.
  
  
• Understand the time value of money and how money can make money to be used in achieving your goals is fundamental in achieving success.
  
  
• Always make payments on time. Be wary of plans with low monthly payments. Lower monthly payments mean a longer period of repayment, which means more interest.
  
  
• Understand the fundamentals of credit history and credit scoring and unfailingly protect and strive to improve both.
  
  
• Pay yourself first (save) just as you would any other financial obligation.
  
  
• Build and maintain a cash reserve
  
  

Before you buy, ask:

Why am I here?

What if I wait?

How do I feel?

How will I pay for it?

Do I need this?

Where will I put it?

What is good money management worth?

Adopting good money management habits rather than poor ones can make you feel as much as 50 percent richer and happier.

– Jean Chatzky, Today Show, October 2, 2003